As electric vehicle giant Tesla prepares to release its quarterly earnings after the market closes on Wednesday, the options market is abuzz with activity. Traders are placing bets that suggest the stock could experience its most substantial move in a year, reflecting a 5.76% implied swing. This level of anticipation is the highest seen since October 2025, when a 6% move was priced in, and would mark the largest actual price change since last July.

The sentiment in the options market on Tuesday leaned bullish, with call options significantly outnumbering put options. Through midday, traders purchased 244,000 calls compared to 116,000 puts, with calls accounting for more than two-thirds of the total premium traded. The most active contracts included calls with an expiration date of Friday, particularly those at the 380 strike price. More than $15 million was invested in these nearly at-the-money calls, costing around $11 per contract. For these specific calls to become profitable by the end of the week, Tesla's stock would need to rise by approximately 3%.

Despite the current options market positioning, it's worth noting that Tesla's stock has historically shown more subdued reactions to earnings announcements. Over the last four quarters, the stock's median movement on earnings days has been a modest 3.5%, according to data from the CBOE. This contrast between options traders' expectations and historical performance adds an intriguing layer to the upcoming earnings release.

Adding another layer of complexity for investors focused on Elon Musk's ventures, SpaceX is set to report its first earnings on August 4th, following its initial public offering last month. The options market is currently indicating a significant 12% potential move in either direction for SpaceX. This upcoming report is seen as a potential wildcard, with some traders speculating about the implications for both companies, including the possibility of a merger.

Gianni Di Poce, an instructor at TheoTrade, commented on the situation, suggesting that while a longer-term bullish outlook for Tesla is possible, the stock has largely traded within a range since the beginning of the year. He noted that the ongoing speculation surrounding SpaceX's performance and its relationship with Tesla is influencing investor decisions.

SpaceX's valuation has seen a dramatic shift since its June IPO. Initially soaring towards a $2 trillion valuation, the stock has since experienced a notable decline, with the company's current valuation standing just below $1.7 trillion. This is now slightly ahead of Tesla's market capitalization of approximately $1.4 trillion.